After three rounds of cuts, Kansas legislators have passed a budget that eliminates a projected $328 million deficit, but depending on the economy, more cuts may be likely.
The $13 billion budget for the state’s 2010 fiscal year includes a 2.75 percent across the board cut, resulting in a barely balanced budget that may go into the red at any time.
The budget, passed early Saturday morning, is estimated to leave the state with $17,000 in cash reserves at the end of June 2010.
“The ending balance is slightly above zero on paper,” said Sen. Jim Barnett.
Included in the budget were two methods to bring in more revenue — a tax amnesty program that gives the secretary of revenue more authority and flexibility in collecting back taxes that will bring in an estimated $30 million and a 10 percent reduction in tax credits. The budget also does not return slider payments to local units of government, which means the county and city will have greater pressure on them to raise property taxes.
Legislators had their work cut out for them this budget season with each new revenue estimate bringing even more dire news. By the time the omnibus session started at the end of April, legislators had a $328 million hole to fill by making deeper cuts than had been anticipated.
Opponents of the budget said they would rather have seen deeper cuts to build up cash reserves and avoid cuts that might be necessary later. Supporters didn’t want to hurt state programs more than they already have been by the cuts.
“It was hard to get a budget that would have provided any ending balances, because when you make cuts the depth that we did, there’s so many ways you know you could spend that money,” Rep. Don Hill said. “Education, developmentally disabled individuals, physically disabled, pick one. There are a whole lot of needs.”
Hill ended up supporting the budget package.
“I voted yes, and I think that under the circumstances this was a vote that I was comfortable with,” Hill said. “I think it was the best we could do, it was a choice among bad choices that were available, and I do feel that we’ve got challenges ahead, but Emporia will come out pretty well.”
If revenues continue to fall short with a zero balance, Gov. Mark Parkinson will have to make additional cuts, a responsibility he said he is prepared to assume. Those additional cuts may be a likelihood.
“More cuts will come,” Barnett said. “Harder times are likely ahead unless the economy grows rapidly enough to recover those deficits.”
Legislators are hoping agencies will be able to absorb this year’s cuts without being hurt too badly. Already, universities and school districts are leaving open positions unfilled, freezing salaries and trying to find ways to save as much money as possible.
“What they’re going to be doing this year is, I think, reasonably manageable,” Hill said. “The problem is there’s a good chance we’ll face the same thing in a year, and that concerns us all.”